IFX Market Report: Friday 25th February 2022

Global markets became incredibly volatile on Thursday as Russian forces invaded Ukraine in a “full-scale” assault. Ukraine yesterday reported troops “pouring across the borders with Russia and Belarus from the north and east, and landing on the coasts from the Black Sea in the southwest and Azov Sea in the southeast”. It is believed that over 60 Russian battalion tactical groups – the equivalent of 30,000 – 60,000 troops – have been deployed on Ukrainian territory. Russian forces are aiming to block the capital Kyiv and create a land corridor on Ukraine’s south-eastern coast towards Crimea and the Transdniestria region of neighbouring Moldova. Thus far, the Russian army have seized control of the former Chernobyl nuclear power station near Pripyat, which is only around 60 miles from Kyiv. As the news broke, investors flocked towards safe-haven assets and risk sentiment plummeted. The Dollar was able to gain ground against both the Euro and Sterling.

GBPUSD started the session yesterday at 1.3481 and fell by over 100 pips, closing the day finally at 1.3357.

GBPEUR in contrast only made a subtle loss on Thursday. The pair opened at 1.1987 and closed at 1.1983.

EURUSD also suffered on Thursday. The pair started the day at 1.1245 and finished below the 1.12 handle, closing at 1.1147.

On the data front it’s a busy schedule. At 07:00 Germany released its final GDP Growth Rate YoY, coming in at 1.8% despite a forecast of 1.4%. At 10:00, the Eurozone is scheduled to release its Consumer Confidence, Economic Sentiment, and Industrial Sentiment. From 11:45 ECB President Christine Lagarde will be giving a speech. Then in the afternoon from the US, Core PCE Price Index and Durable Goods Orders are due at 13:30. Then at 15:00, the all-important Michigan Consumer Sentiment is released, forecasted at 61.7.

While the market will be looking at data closely, it will be geopolitical issues that will likely direct markets.

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